Holocaust Insurance Panel Called `A Disgrace'

Few Claims Have Been Settled, And Firms Have Been Accused Of Stonewalling.

February 3, 2002|By Greg Garland, National Correspondent

Before the Nazis sent them off to their deaths, Alfred and Meta Meyerstein did their best to provide for their 18-year-old son, Ralph, who had managed to escape Germany for safety in England.

In the 1920s, Alfred Meyerstein had taken out two life-insurance policies with Allianz, then and now Germany's largest insurer. His wife wrote to their son in 1939 to make sure he knew they were keeping up on payments for the policies.

But more than a half-century later, Ralph Meyerstein, now 81 and living in Baltimore County, has yet to see a penny of the insurance money -- despite persistent efforts to collect.

"They want for all of us to die, and they bury the claims with us," Meyerstein said.

Now, Meyerstein's hopes for a settlement rest with a private, voluntary international commission created three years ago by U.S. regulators, European insurers and Jewish groups. The panel's goal is to resolve claims and see that survivors receive any proceeds due from insurance policies.

But records and interviews show that the commission so far has fallen far short of that goal. Fewer than 1 percent of the 77,800 claims submitted to the panel, known as the International Commission on Holocaust Era Insurance Claims, or ICHEIC, have led to settlements.

And while the commission has spent $40 million on administrative expenses, its efforts as of last fall had resulted in just 758 settlement offers and only about $12 million in claims payments, according to the panel's records.

Even some of those who worked to create the commission now consider it an abysmal failure. "This is a scandal, the way the survivors have been handled," said Deborah Senn, Washington state's former insurance commissioner and a key player in ICHEIC's founding. "It's a disgrace."

EUROPEAN INSURERS BLAMED

The commission's poor track record, critics say, is due in large part to stonewalling by European insurance companies. The companies agreed to participate in the process but have not been willing to open their files and release comprehensive lists of people who held policies from 1930 to 1945.

Such lists are important because many heirs were children during the Holocaust and do not know if their parents had insurance. With access to insurance-company files, the heirs -- or heirs' descendants -- could find out if they are owed money.

"The whole issue of names is enormous," said Bobby Brown, Israel's representative on the commission.

But representatives of the European insurance companies have fought the release of name lists -- citing privacy laws, the costs of researching and compiling names and other concerns.

As Senn sees it, the insurers fear that publishing the names of policyholders would increase their exposure. "It serves the purposes of the insurers to resist publication of names which would inevitably expand the number of claimants," she wrote in a December 31, 2000, status report on ICHEIC's efforts. "In short, if you suppress the names, you suppress the claims."

The commission's failure to resolve the impasse on name lists and other key issues has proven especially embarrassing to its chairman, former Secretary of State Lawrence Eagleburger.

In November, he was castigated by a congressional committee upset about the sluggish pace of claims payments. And at a recent commission meeting in Washington, he became so frustrated by internal feuding that he abruptly quit -- albeit briefly -- in disgust. Eagleburger, 71, was persuaded the next day to rescind his resignation from his $350,000-a-year post as chairman, after he was promised broader decision-making authority.

Last week, Eagleburger did not respond to telephone messages and a written request for an interview. However, he acknowledged to the congressional committee in November that the commission's work has "taken too long and it's cost too much," blaming the problems largely on the insurance companies.

The commission's poor performance angers many, including Israel Arbeiter of Newton, Mass. He survived Auschwitz but lost his parents and a brother to the Nazi terror. "This is outrageous, to spend $40 million to collect that small an amount," Arbeiter said. "If they can't do the job, they should get out of the way and let somebody else do it, not sit back in their offices and get high salaries."

NO CONSENSUS REACHED

The international commission was established as a streamlined process for settling unpaid claims outside of the court system. It was to use more relaxed standards of proof to determine whether claimants are eligible for payment.

Members include representatives of five big European insurance companies and the Dutch Insurance Association, Jewish groups, and U.S. and international insurance regulatory agencies.